2017 (2) TMI 943 - AT - Central Excise

SSI exemption - use of brand name by others - Recovery of duty - duty not paid on the ground of being eligible for exemption from duty as small scale units - the products manufactured by the appellant bear the mark MULTIPLEX under which M/s Multivision Electronics Pvt Ltd also manufactures the same goods - Held that - The exemption notification supra denies the benefit only if the brand does not belong to the user and the statements of key functionaries do not admit that the brand has been borrowed from any other. The contention of Revenue that brand does not belong to appellants merely because it is used by someone else is also not borne out and the absence of such evidence was noted in Minimax Industries v. Commissioner of Central Excise, Delhi-II 2010 (1) TMI 1040 - CESTAT NEW DELHI where it was held that Mere user of the name or logo used by others which has not acquired the status of brand name or trade name within the meaning of the said expression under the said notifications, in our considered opinion cannot amount to violation of condition No. 4 of the said notification. Appeal allowed - decided in favor of appellant.

Issues:
1. Recovery of duty and penalty on grounds of exemption eligibility for small scale units.
2. Allegation of manufacturing goods bearing a brand name used by another company.
3. Dispute over the ownership of the brand name 'MULTIPLEX' and its connection to other users.
4. Interpretation of notification no. 8/2003-CE denying benefits to products bearing brand names of others.
5. Comparison with previous legal judgments and their relevance to the current case.
6. Claim of independent entitlement to use the brand name 'MULTIPLEX.'
7. Examination of evidence regarding brand ownership and its impact on exemption eligibility.
8. Precedents set by Tribunal decisions regarding brand ownership and small-scale exemption eligibility.
9. Lack of evidence establishing brand ownership by another entity.
10. Application of circulars and opinions supporting the use of brand names not belonging to any specific manufacturer for exemption eligibility.

Analysis:
The judgment by the Appellate Tribunal CESTAT Mumbai involved three appeals challenging orders related to the recovery of duty and penalty for small scale units. The dispute centered around the manufacture of coin telephone boxes bearing the brand name 'MULTIPLEX,' which was also used by another company. The Tribunal analyzed the notification denying benefits to products with brand names of others and compared it to previous judgments, noting the importance of brand ownership in determining exemption eligibility.

The appellants argued that the brand name 'MULTIPLEX' was commonly used and not connected to any other user, claiming independent entitlement to its use. The Tribunal examined the evidence presented by the Revenue and found it insufficient to prove that the brand belonged to another entity. Citing previous decisions, the Tribunal emphasized the onus on the Revenue to establish brand ownership before denying exemption benefits.

Referring to circulars and opinions supporting the use of brand names not owned by a specific manufacturer, the Tribunal concluded that the appellants were eligible for exemption as the brand name 'MULTIPLEX' did not belong to any particular entity. Based on the analysis of evidence and legal principles, the Tribunal allowed the appeals and set aside the impugned order, highlighting the importance of brand ownership in determining small-scale exemption eligibility.

Overall, the judgment provided a detailed analysis of the issues involving brand ownership, exemption eligibility, and the interpretation of relevant legal provisions and precedents, ultimately ruling in favor of the appellants based on the lack of evidence establishing brand ownership by another entity and the principles supporting the use of brand names not belonging to a specific manufacturer for exemption eligibility.

← Previous Next →